In an effort to bridge the gap between the online and offline shopping worlds, China's Single's Day online shopping festival is expanding this year to traditional stores.
Alizila, the news website of the Alibaba Group, reported that a number of brands on Tmall are extending their promotional actives to some 30,000 physical stores.
By encouraging shoppers to visit stores to touch, feel and try out the products, retailers hope to encourage sales. However, they can still opt to buy the goods online.
Here's a paradox: Manufacturers are seeing big sales increases in China while retailers in the country are struggling, losing money, closing stores, going out of business.
The number of new shopping malls in China is expected to nearly double to a record high this year as developers bet on consumers picking up the slack in the world's second largest economy, says property services firm Jones Lang LaSalle.
The number of new shopping malls built in China's top 20 cities is forecast to jump to 150 this year, compared to 80 in 2012 – that's an almost 88 percent increase, Jones Lang LaSalle said.
The firm also expects the average mall size to increase from 710,418 square feet in 2005 to now exceed over 947,224 square feet.
According to the 2013 China Consumer Market Development Report released by China’s Commerce Ministry, consumer goods sales will grow 13 percent year-on-year, a figure that’s lower than previous years, but still robust by global standards.
The run-up to Chinese New Year, which starts on 10 February and will mark the Year of the Snake is a key shopping period. And this year more than ever, the spending patterns of China's 1.3 billion people are expected to be scrutinised as a measure of how the economy is fairing – not only as it recovers from last year's slowdown, but also as it switches from a reliance on exports to consumption.
The slowdown of the Chinese economy is forcing Western retailers to rethink their once rampant expansion in the country while making big shifts in their strategies.
Retail sales of consumer goods rose 15 percent to CNY800.6 billion (USD127.2 billion) on the mainland during the eight-day "golden week" holiday that ended on Sunday, surpassing industry expectations.
The Ministry of Commerce said the retail sector, restaurants and tourism all saw robust growth during the Mid-Autumn Festival and the National Day holiday between 30 September and 7 October.
China's slowing retail growth environment has signalled the peak of the consumer story, according to Francis Lon, Managing Director of Lynen Holdings.
Lon says the Chinese economy is too dependent on fixed asset investment, and consumers can't carry the burden when this drops off.
Sluggish consumer demand has led to a slide in China's retail sales this year. July retail sales fell to 13.1 percent year on year, down from 13.7 percent in June. This is well off the 17.1 percent in 2011 and 18.4 percent rise in retail sales in 2010.
While China's retail market continues to expand, retailers are at risk of being squeezed in top tier cities by market saturation and e-commerce.
First- and second-tier cities are facing market saturation of luxury goods, say two researchers at Fitch Ratings via the Shanghai Times. Deceleration in same-store sales growth is being attributed to the government crackdown, weaker economic growth, and the rise of online shopping.
When Walmart entered the mainland Chinese market at the forefront of Shenzhen 17 years ago, a bunch of well-known foreign retailers, such as Parknshop, Carrefour, Aeon and Tesco, followed its step to explore opportunities in the country. However, ever since last year, the top three foreign retail giants Walmart, Carrefour and Tesco started to slow down on expansion or even close stores.